Traditionally, bidding on advertisement (“ad”) placement is performed by placing a static bid on inventory (e.g., impressions of participating publishers). Generally, such a bid is associated with certain targeting criteria. For example, the bid may be associated with contextual keywords or a specific placement on a webpage.
While this bidding process works well for individual advertisers that plan and manage their respective ad campaigns, the process is inefficient for buyers who are bidding on behalf of a large number of advertisers, or ad networks that manage millions of ad campaigns. If a buyer wants to buy impressions from a publisher network, the buyer may place a static bid with the publisher network or with a host of the publisher network. Placing static bids, however, may expose sensitive bidding information associated with the buyer to the publisher network.
Additionally, ad campaigns may change frequently depending on various conditions such as consumer needs, market trends and geographic locations. When changes in the buyer's campaigns arise, multiple updates of the static bids are needed to reflect the changes in the ad campaigns.
Importantly, the value of an impression depends on a number of factors, such as geographic location, time of day, and the like. Hence, it is difficult to pre-compute a correct bid for an advertisement placement and use the pre-computed bid as a static bid. Often, the pre-computed bid does not actually reflect the true value of the bid, resulting in sub-optimal performance by forcing the buyer to overpay on some bids or underestimate the value of other bids.